The outstanding issues, some of which are proving contentious, range from developers’ concerns about securing future water supplies to lining up funding for Pinal County farmers to drill wells and begin to pump more groundwater.

A disagreement has also flared up over the terms of an “offset” provision that involves leaving water in Lake Mead to boost the levels of the dwindling reservoir.

These complications will force more talks geared toward achieving a consensus as the state Legislature begins session Monday and starts working on legislation that would authorize Arizona’s participation in a Drought Contingency Plan, or DCP, with Nevada and California.

Gov. Doug Ducey has called for the parties to quickly wrap up a deal, saying that with a critical shortfall imminent on the river, “we cannot kick the can any further.”

But at a meeting of the state’s steering committee Tuesday, the to-do list still appeared long. And several members of the committee voiced pointed disagreements on provisions that have yet to be finalized.

Last month, federal Reclamation Commissioner Brenda Burman set a Jan. 31 deadline for Arizona and California to finish their agreements and sign on. She said if the states fail to meet that deadline, the federal government will get involved and step in to prevent reservoirs from falling to critically low levels…

[Tom Buschatzke] and other water managers began the meeting Tuesday with an overview of where water levels stand in the river’s main reservoirs. Lake Powell is now 41 percent full, while Lake Mead is 39 percent full, just above a level that would trigger a first-ever declaration of a shortage.

They also reviewed a list of issues that have yet to be resolved, some of which relate to concerns of farmers in Pinal County, who have the lowest priority and face the biggest cuts in water deliveries.

The farmers had expressed worries about taking especially large cuts in the scenario of a more serious “tier 2” shortage at Lake Mead, and Tucson city officials have proposed to help in that scenario by providing the farmers up to 35,000 acre-feet of water per year for two years. (An acre-foot is 325,851 gallons, enough to cover a football field with a foot of water.)

“We believe it’s a prudent thing to do to give the certainty to Pinal agriculture that they’re seeking on volume in the first three years,” said Timothy Thomure, director of Tucson Water. He said city officials will help finish the Colorado River deal while presenting no risks to the city.

To make the deal possible, the city would ask that water credits in the Tucson groundwater management area be transferred to the city in exchange for credits it would get in Pinal County.

He said Tucson is also asking for reforms affecting how treated sewage effluent figures in the state’s framework of water laws. One of the changes, Thomure said, would be to eliminate a 2025 “sunset” provision on water agencies’ ability to get storage credits for effluent. The city is also seeking more long-term storage credit when effluent is used to replenish groundwater.

Buschatzke called it a “very creative proposal” and said he expects more talks will be needed to work out the specifics…

Representatives of developers have been pressing for a provision conditionally granting them a certain amount of water — 7,000 acre-feet per year — for the first three years of a shortage. Ted Cooke, general manager of the Central Arizona Project, supported the idea and said this provision for an additional water supply would go away if the Drought Contingency Plan is signed.

As the developers have proposed it, the conditional water supply would be included to backstop a larger deal that’s already set to free up more water for future development — just in case the plan isn’t signed in the end.

In that larger $95 million deal, the council of the Gila River Indian Community agreed last month to sell up to 33,185 acre-feet annually to the Central Arizona Groundwater Replenishment District for 25 years starting in 2020 — enough to supply more than 99,000 homes based on the average water use in the area. The transfer would take effect once Arizona signs the Colorado River deal.

That Gila River Indian Community’s water deal was welcomed by developers because it secures water supplies for more growth into the 2030s, said Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona.

“But having said that, like everybody around the table, we’re seeking certainty. And there is uncertainty on the DCP plan going through the legislative process,” Kamps said. “My members are seeking certainty as it relates to investment from, you know, our corporate offices.”

He said developers want to be sure that when a shortage is triggered “that there is a reliable supply.”

“The concern from us is the uncertainty if anything were to happen, obviously, moving forward with the DCP plan, and it wasn’t satisfactory to either the governor or whomever,” Kamps said. “And I think that’s a reasonable request, to ensure that development can move forward regardless of the conditions on the lake during this 7-year program.”

The developers’ proposal was firmly opposed by Buschatzke, who said adding that amount of water for three years would upset the “delicate balance” that has been negotiated in the plan. Buschatzke also said: “I’m not sure where that water would come from.”

Cynthia Campbell, a water adviser for Phoenix, called the developers’ proposal “unthinkable” and said the city won’t support it.

“We don’t have enough water to go around for all the contract holders,” Campbell said. “Why would you start talking about adding new parties to the dole? That’s crazy.”

Gov. Stephen Roe Lewis of the Gila River Indian Community said he thought the issue of future water supplies for development had been dealt with already. He said the council’s resolution approving the water deal is “self-executing” once Arizona signs the Drought Contingency Plan. He offered to consult with his council and send a letter clarifying the point.

Donald Pongrace, a lawyer for the Gila River Indian Community, said after the meeting that the developers’ proposal “would create a precedent of providing water out of priority that we and all other CAP contract holders would find objectionable.”

Lewis’ offer of sending a letter to clarify that the signing of the Colorado River agreement will trigger the water transfer should be sufficient to resolve the issue, Pongrace said, though he said it’s “unnecessary and somewhat insulting to the community’s integrity and overall participation in the process.”

[…]

Another issue that drew opposition from Lewis and Buschatzke was a proposal by CAP officials regarding the “offset” component of Arizona’s plan, which involves deducting some water supplies from a Lake Mead storage account and replacing those supplies on paper with water from other sources.

Originally the idea had been a water exchange between CAP and Salt River Project, but CAP officials have instead proposed an alternative in which their agency would keep the stored water in their account. Pongrace said that’s likely a nonstarter for the Gila River Indian Community because it would give the CAP board discretion to use the water as it sees fit, and potentially take the water out.

“It’s basically calling something conservation that isn’t,” Pongrace said. “It’s the equivalent of financial gimmickry, and we will not accept it.”

Despite the disagreements and the short timetable for drafting legislation, Cooke and Buschatzke both expressed optimism about finishing a deal.

“We’re going to work on things between now and when the legislature starts, and we’re going to work on things after the legislature starts,” Cooke said. “I think we’re closer than we’ve ever been, and I think we’re in closure range, definitely.”

Cooke said CAP and state water officials will work with legislative staffers to draft the package of legislation, and the idea is to keep it simple. The legislation is to include a resolution approving Arizona’s participation in the Drought Contingency Plan together with California and Arizona, as well as other measures outlining funding for the plan and several other changes that will be necessary to make it work.